IT specialists to be a symbol of Russia's new generation

Russia’s Deputy Minister of Communications Mark Shmulevich: We still have a lot to do to improve the IT sector in Russia. Source: Ministry of Communications

Russia’s Deputy Minister of Communications Mark Shmulevich spoke to RBTH about peculiarities of the Russian IT sector.

Russia’s Deputy Minister of Communications
Mark Shmulevich spoke with Elena Shipilova of RBTH about how IT can become
Russia’s leading non-resource sector in terms of export volumes, what to do in
order to make the profession attractive among young people and what foreigners
can learn from their Russian counterparts.

Russia Beyond the
Headlines: The Ministry of Communications and Mass Media plans to increase
exports of the Russian IT sector so that it rivals the defense industry. But
how and when can this be done?

Mark
Shmulevich: Software exports from Russia soared from $200–$300
million per year in the 2000s to $4 billion in 2012, according to various
estimates. The sector has been growing an average of 20 percent annually over
the past few years.

Related:

In 2012, Russia sold approximately $15 billion worth of
arms to foreign buyers. If the trend continues, then we will soon be able to even
closer to the defense industry, despite the expected growth in foreign arms
supplies. A major increase in IT exports is not an end in itself; it is rather
an indicator of how well the IT sector is developing and how well Russia is
integrated into the global economy.

RBTH: During the last decade, Russian software
giants such as Kaspersky Lab and ABBYY have accounted for the majority of this
increase in export supplies. Is there any demand for the products of
medium-sized companies or startups?

M.S.: Export is
also growing thanks to outsourcing to Russia, and that’s what
medium-sized companies do. When it comes to software products, we have had some
successful projects, too. Take Ecwid, for example [a system that creates
e-commerce platforms and has a strong working relationship with Facebook], or
Prognoz [which produces analysis systems for companies] and Diasoft [which
provides automation of banking and insurance systems].

There are many such
examples, all of which offer internationally competitive products. Many of them
were startups, but they have now found their niche. The only question is
whether they are interested in staying in Russia
or shifting their business to a neighboring country, Europe or the U.S., where the
business environment is often more favorable.

M.S.: There are
two blocks of institutional arrangements that are critical to the development
of the IT sector. These are the favorable tax regime and availability of
skilled personnel. We have a preferential social tax – 14 percent instead of 30
percent – for companies where I.T. services and products account for 90 percent
of business.

The discount is valid through 2017. But it’s not enough for them
to keep developing at their current pace, and we are working on having the
preferences extended until 2020. It is important that the state pursue a
consistent policy on IT; some countries have a moratorium on sudden
aggravations of the tax regime. To ensure sustainability, these companies need
to understand that the rules of the game won’t change overnight.

RBTH: The reputation of Russian programmers in
the global market is that they can deliver where Chinese, Indian and even
American specialists have failed.

M.S.: They can
learn from our ingenuity and resourcefulness. It is this competitive advantage
that promotes the Russian outsourcing segment. Our graduates are excellent
engineers, but there is a significant shortage of them. Currently, less than 1
percent of the Russian workforce is employed in the IT sector, compared with more
than 4 percent in the U.S.
and 3 percent in Europe.

The ministry has a considerable challenge to address, namely, how to make this
profession more popular. We had a roundtable conference on the personnel
problem in IT at the 10thKrasnoyarsk Economic Forum in Siberia not
so long ago.

Representatives of the IT industry, from startups to Yandex and
Microsoft, as well as large consumers of IT services like Sberbank, the World
Bank and many more, were all in attendance. We are already putting in practice
some of the provisions adopted at the conference. Once of these is placing an
emphasis on programming competitions.

RBTH: There is an American video on YouTube
showing the founders of Microsoft, Facebook, Twitter and Dropbox explain why it
is important to learn programming. Will Russia have anything of this kind?

M.S.: We won’t directly
copy the American idea, but such things are absolutely required in Russia. Videos
are just one of the methods. Our task is to turn the IT specialist into the
symbol of this generation. To this end, we should have TV shows about the
sector, talk to school students about career prospects, have meetings with
successful IT personalities and, possibly, shoot a TV series about
programmers.

RBTH: When you were working on the development
plan for the sector, were you building on the experience of those countries
that have succeeded in IT?

M.S.: Unfortunately, you can’t just take someone else’s
model and apply it to Russia without adjustment. We have some important
peculiarities and pitfalls. But we are keeping an eye on developments in other
countries. India liberalized
its regulations on currency options, so we are looking at how this could apply
to Russia.
Options are not yet an effective motivation tool in Russia.

We are studying the
special tax regimes (like the Patent box in the UK). We are also building on
other countries’ experience in copyright protection. The fact that we are
lagging behind gives us an advantage in, say, patent wars. When it comes to
infrastructure, we are exchanging experience in the creation of technoparks
with Singapore and Israel. We still have a lot to do to improve this sector in
Russia.